taxesagain

1) My take on the property tax situation is that people are up at arms for three main reasons.
a) There is a mismatch between what they are paying (property taxes) and the services these taxes go towards (that is, gas tax goes for highways, everyone knows that and it makes paying the tax more palpable; while elderly couples without kids are paying high levels of taxation mainly to go to schools)
b) The huge increases seen (50 to 100% or more) (most people understand their property values have gone up but these huge increases are undermining family economics and taxpayer morale at the same time) and;
c) A wonderment that if my taxes double, where is all that money going towards? That is, I have not seen government services double their quality so what am I getting for all that I am paying?

My suggestions for resolving this dilemma are as follows:
1) Realign the tax system. Some have cried out for totally abolishing the property taxes. I believe there is a purpose for it if it is reformed into a true user tax. I propose that property taxes be used for only those governmental accounts that are related to property: a) security (police, and criminal justice system including prisons and jails), b) fire protection, c) trash and waste, and d) local road maintenance. Perhaps a few more might be included (for example parks and bike paths since they enhance the value of your property) but these are the major items. As can be seen, a direct connect can be made to each of these. All are directly related to your property, your house or residence and the protection or increased valuation thereof.
2) Secondly, I propose that ALL property be taxed. This includes non-profits (including churches), all governmental entities, commercial as well as private. In addition, not just real estate but the value of all possessions on the property should be included (after all, a thief is as interested or more in the jewelry and computers that exist under your roof as your property alone). Notice ALL property . . . a church is protected by the police and fire, why should not it pay according to the value of its property. A property with a BMW and a JAG in the garage has more to protect than a similar property with two ten year old compacts in the garage, why should they not pay more? This means that renters would pay a tax on their possessions but not the residence.
3) A major problem that has come up in Indiana deals with property evaluation and reassessment. All property values should be considered at current market value (what an unaffiliated entity would pay for the property). Reassessment should be at the time of the sale (sale amount) or every 5 years. If after 5 years, a revaluation is made, the value upon which the tax should be paid should not increase beyond 10% per year until it reaches the new assessment level. Once again, the public does not argue that its property has gone up in value only that the increase is all at once and offers a dreadful sticker shock.
4) To counter the third concern: where did all the money go? I suggest a cap on the property tax as well as a cap on increased government take (that is, government spending cannot exceed 3% per year with anything over that refunded back to the taxpayers).
Since education has been deleted and the taxable items made more encompassing, it is highly probable that the direct property tax rates (typically 1 to 4% of the residential value) will fall drastically. And in addition, the public should be considerably more amiable to paying for services that can directly connect with the taxes.

Allocation of the monies. The state should institute the tax state wide and deliver the monies to the county. Each county and municipality should then have the option of including a local surtax. The county should be the fiscally responsible agent.
Where does education come in? If Property taxes are not to be used to fund education, then what? The relationship between income and education level is quite conclusive: the better educated one is, the higher one's income. Therefore, a better revenue provider for education should be the income tax . . . of a flat, minimal exemption variety. Education dollars should come through the state coffers via the income tax and flow directly to those eligible . . . students from K through grade 16 That is, each student would receive a voucher for his/her share that could be used for any state approved educational institute in the state . . . public or private. This means that while we are at the process of revising the tax system we might want to review the educational process as well.

What do you think?
Thanks for the opportunity to voice my views.